Emerald disputes pool claims

IN the wake of its disappointing 2011/12 wheat and barley pool performance, Emerald Grain has disputed grower claims its pools dropped by up to $40 a tonne since the company provided its January guidance numbers.

IN the wake of its disappointing 2011/12 wheat and barley pool performance, Emerald Grain has disputed grower claims its pools dropped by up to $40 a tonne since the company provided its January guidance numbers.

Emerald told Farm Weekly the balance sheet didn't perform as terribly as recent media reports would have its audiences believe.

Last week the company confirmed the final results for all four of its 2011/12 wheat pools.

It announced its headline Dynamic pool delivered a final estimated pool return (EPR) of $269/t ($10/t ahead of the EPR indicated to growers in January), which was a competitive figure when compared to similar pool products in the market.

It was what Emerald's general manager of distribution Tom Howard called an actively-managed pool because it was marketed and hedged throughout the pool's life.

But it was Emerald's Stable and Traditional 2011/12 pools which caused grief for the company's WA growers - both of which were lowered by $10-$20/t.

Last week the company said the Stable and Traditional pools (which paid $231/t and $234/t respectively in WA) used prescriptive, conservative marketing strategies in line with the marketing strategy published and outlined for both pools.

They were hedged early on in the life of the pool and because of this, missed the May-July 2012 rally.

Emerald said the returns on these pools were at the lower end of the pool range and like growers, it was disappointed with the outcome.

Bencubbin's Stuart Putt who spoke with Farm Weekly last week, said this didn't change the fact his budget was still out by about $60,000 because of Emerald's terrible pool performance.

Others included two Wickepin farmers who were out of pocket by $40,000 and $150,000 respectively.

"For nearly a year Emerald has been encouraging growers to look at cash and structured cash products as a grain marketing alternative to pools," Mr Howard said.

"We have received very positive feedback on these products.

"We have also said in the past that EPRs are not a perfect guide and growers cannot rely on EPRs as an accurate indication of final pool return."

Mr Howard also said recent speculation in the market place by industry commentators had led to unsubstantiated statements that Emerald pools dropped by up to $30-40/t since the company provided its January guidance numbers.

He said the numbers weren't given in a statement released by Emerald and therefore were not correct.

"Some of the pools have actually risen since the January guidance while others have fallen," Mr Howard said.

"It's critical at this time that growers have the correct information and aren't being misinformed."

Emerald has this week written to growers advising them on 2011/12 pool finalisation and expects to make final payment by April 29.

Last week CBH also finalised its 2011/12 wheat harvest pool with a final pool return of $280.04/t for APW2.

At the moment the CBH wheat harvest pool provides the greatest return (by an average of $11/t) when compared to other wheat pools offered for the 2011/12 season.

CBH's head of trading Don Campbell said despite the pool's grain being 75 per cent sold and hedged prior to the mid-year rally, the portfolio was able to partially participate through option structures and active management.

"Throughout the life of the pool Australian dollar hedging was focused on tracking physical sales over the course of the season," he said.